I did not really feel the need to opine further until I caught the following post from C3 Associates today entitled “SAP Agreement to Resell Livelink the First Step in the Acquisition Tango?” and it made me think about the notion of Open Text being acquired by SAP more deeply.

Well, the more I think about it the more it makes complete sense. After IBM snapped up FileNet and Oracle bought Stellent who else could SAP turn to. SAP has established sound footing powering mission critical business processes in many Global 5000 customers but has never fielded a credible ECM solution to marry to the transactional ERP solutions built on top of SAP.

By buying Open Text, SAP can own and control the unstructured content management side of the enterprise information management equation with a credible solution that can be even more tightly integrated with SAP. It just makes sense. Especially since SAP is competing with Oracle and IBM for the remaining ERP business out there.

So, what do YOU think? Will Open Text be the next redwood to be taken down in the ECM forest?

While SAP buying Open Text is something that could be imagined from the “it just makes sense” standpoint, let’s be clear that there are no facts to support it. Pure conjection by outsiders.

Moreover there are a number of things that suggest it doesn’t makes sense and won’t happen, such as:

– Open Text has clearly stated it doesn’t want/need to be purchased.
– SAP typically does not acquire companies of Open Text size (I can’t think of a single example)
– Hasso Plattner has gone on record numerous times about how opposed he is to acquiring companies and technology
– Open Text has partnerships with SAP archrival Oracle, and many Oracle customers
– SAP has done a number of reseller agreement in other segements that have not lead to SAP acquiring the company
– SAP is focused on mid-market growth, not expanding enterprise sales per se(Open Text is focused on enterprise)

Given that Open Text is the only independent ECM player of any size left in the market, the natural assumption is that it will fall too. But with the acquisition of Hummingbird, that is becoming more and more unlikely. What’s more likely is the Open Text will become a $1 billion company and the most important company in space.

In the interest of full disclose, I’m with Open Text’s PR agency and also have five+ years experience working on SAP’s PR team. This isn’t spin: I honestly don’t see such an acquisition happening.

While SAP buying Open Text is something that could be imagined from the “it just makes sense” standpoint, let’s be clear that there are no facts to support it. Pure conjection by outsiders.

Moreover there are a number of things that suggest it doesn’t makes sense and won’t happen, such as:

– Open Text has clearly stated it doesn’t want/need to be purchased.
– SAP typically does not acquire companies of Open Text size (I can’t think of a single example)
– Hasso Plattner has gone on record numerous times about how opposed he is to acquiring companies and technology
– Open Text has partnerships with SAP archrival Oracle, and many Oracle customers
– SAP has done a number of reseller agreement in other segements that have not lead to SAP acquiring the company
– SAP is focused on mid-market growth, not expanding enterprise sales per se(Open Text is focused on enterprise)

Given that Open Text is the only independent ECM player of any size left in the market, the natural assumption is that it will fall too. But with the acquisition of Hummingbird, that is becoming more and more unlikely. What’s more likely is the Open Text will become a $1 billion company and the most important company in space.

In the interest of full disclose, I’m with Open Text’s PR agency and also have five+ years experience working on SAP’s PR team. This isn’t spin: I honestly don’t see such an acquisition happening.

Why the focus on SAP? There are other large enterprise software companies out there that still have much to gain by having a larger share in ECM space than they currently have.

Just becuase IBM bought FileNet and Oracle bought Stellant, does not mean that they are done acquiring other ECM companies.

Any company that acquires Open Text automatically gets roughly 20% of the ECM market share, including the largest ECM market share in Europe.

IBM, Oracle, Microsoft, even HP to name a few, all have the same ambition: to have the largest, most comprehensive software suite out in the market, and that includes the largest share of the ECM market.

ECM does not live in a vacuum, and large enterprise software firms with a lot of ambition and cash, know that.

Why the focus on SAP? There are other large enterprise software companies out there that still have much to gain by having a larger share in ECM space than they currently have.

Just becuase IBM bought FileNet and Oracle bought Stellant, does not mean that they are done acquiring other ECM companies.

Any company that acquires Open Text automatically gets roughly 20% of the ECM market share, including the largest ECM market share in Europe.

IBM, Oracle, Microsoft, even HP to name a few, all have the same ambition: to have the largest, most comprehensive software suite out in the market, and that includes the largest share of the ECM market.

ECM does not live in a vacuum, and large enterprise software firms with a lot of ambition and cash, know that.

Keep in mind also that OpenText is still dealing with the challenges of integrating both Hummingbird AND Red Dot. All three have some overlapping competencies – and they are just beginning to figure those out.

Add in the fact that when OpenText bought Hummingbird – they had to make committments to several government agencies – most notably the government of Alberta Canada – to support and upgrade Hummingbird’s Document Management platform for the next 10 years. That has to complicate any plans to transfer ownership a 3rd time in less than 12 months

I just think that coming to the well so soon after the last two purchases would be a disaster.

As a customer with Red Dot and Hummingbird software – if we were to have to endure another aquisition so soon, we’d take a serious look at what EMC and IBM have to offer.

Keep in mind also that OpenText is still dealing with the challenges of integrating both Hummingbird AND Red Dot. All three have some overlapping competencies – and they are just beginning to figure those out.

Add in the fact that when OpenText bought Hummingbird – they had to make committments to several government agencies – most notably the government of Alberta Canada – to support and upgrade Hummingbird’s Document Management platform for the next 10 years. That has to complicate any plans to transfer ownership a 3rd time in less than 12 months

I just think that coming to the well so soon after the last two purchases would be a disaster.

As a customer with Red Dot and Hummingbird software – if we were to have to endure another aquisition so soon, we’d take a serious look at what EMC and IBM have to offer.